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Toy maker Lego to cut 1,400 jobs globally as revenue falls

Xinhua | Updated: 2017-09-06 09:41
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The window of a Lego shop in Copenhagen, Denmark, April 19, 2017. [Photo/Agencies]

COPENHAGEN - Top toy maker Lego Group will cut about 1,400 positions, or around 8 percent of its total global workforce, as revenue fell 5 percent for the first half of 2017, the company announced Tuesday.

Sales for the first six months of 2017 totaled 14.9 billion Danish kroner ($2.4 billion), down from 15.7 billion kroner for the same period last year, according to its half-yearly financial report.

Operating profit for the first half of 2017 declined by 6 percent to 4.4 billion kroner, down from 4.7 billion kroner of the first half of 2016.

Performance across the market regions was mixed. Though Lego saw revenue grew by double digit in such growing markets as China, its revenue declined in established markets such as the United States and in parts of Europe.

"We are disappointed by the decline in revenue in our established markets, and we have taken steps to address this," Lego Group Chairman Jorgen Vig Knudstorp said in a statement.

During the past five years, Lego Group has built an increasingly complex organization to support global double-digit growth.

"In the process, we have added complexity into the organization which now in turn makes it harder for us to grow further," Knudstorp explained.

"We will build a smaller and less complex organization than we have today, which will simplify our business model in order to reach more children. It will also impact our costs."

As a result, the group plans to reduce its workforce by around 8 percent, which would impact approximately 1,400 positions, with the majority before the end of 2017.

Meanwhile, it will also explore adjustments to its successful formula for product development and marketing in order to return to growth.

Lego Group is a privately held, family-owned company with products sold in more than 130 countries and regions. It currently employs approximately 18,200 people worldwide.

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